BEIJING, Sept.15 -- HSBC Holdings Plc, Europe's biggest bank, said it filed an application to China's regulators to set up a life insurance company.

"We have filed an application to establish a life insurance company," Clive Bannister, group managing director of HSBC's insurance unit, said at a press conference in Hong Kong yesterday. The application is pending approval from the China Insurance Regulatory Commission, he added.

HSBC is relying on its insurance business in Asia to help restore profit growth, Bloomberg News said. The London-based bank agreed to buy stakes in insurers in India and Vietnam this week as it strives to double profit in five years.

HSBC, which earned 1.6 billion U.S. dollars pretax profit from insurance in the first half of 2007, will buy stakes in rivals or enter joint ventures to expand the business, depending on regulations in different countries, Bannister said.

HSBC is bullish about the outlook for insurance business in Asia, which contributed a third of the division's profit in the first half. The accumulation of wealth in the region means more people are planning for retirement.

The bank announced plans on Thursday to buy 10 percent of Bao Viet Insurance & Finance Group for 255 million dollars.

The bank can increase that stake in Vietnam's biggest state-owned insurer to 25 percent in two stages within five years.

The nation's insurance business could be worth 7.5 billion dollars, tripling the value of Bao Viet's 35-percent market share, he said.

Bao Viet's pretax profit was 492.4 billion Vietnamese dong (30.3 million dollars) last year, according to its Website. Given that the whole company may have an indicative value of 2.5 billion dollars, HSBC may have paid a multiple of almost 100 times last year's earnings.

(Source: China Daily)